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Published: Sunday, 1/2/2005

Deters run as treasurer comes to an early end

BY JIM PROVANCE
BLADE COLUMBUS BUREAU

COLUMBUS It was February, 2001, and Treasurer Joe Deters was flexing his fund-raising muscles, trying to prove, with $1 million in the bank for an election still 22 months away, that he had the most support for Ohio attorney general.

Tomorrow, after watching three of his associates plead guilty to misdemeanor charges stemming from his campaign fund-raising efforts, Mr. Deters will leave the treasurer s office in midterm, returning to roots as Hamilton County prosecutor.

He no longer talks aggressively about running for attorney general, despite the fact he was virtually promised the 2006 GOP nomination by party leaders in exchange for stepping aside for then-Auditor Jim Petro in 2002.

If you had told me Aug. 1 that I d be Hamilton County prosecutor on Jan. 1, I would have thought you were crazy, said Mr. Deters in an interview. I just don t know what s going to happen in 2006.

I have made it pretty clear that the attorney general s position was something I ve always been interested in, but I ve never loved a job as much as I loved being Hamilton County prosecutor, he said.

The 47-year-old Republican would prefer talk focused on the awards his office has received, his Women and Money seminars across the state, and the investment returns earned on Ohio taxpayers money during his six years as treasurer, including a record $400 million return in 2001.

Gov. Bob Taft s choice to replace him, Republican Lt. Gov. Jennette Bradley, said she faces a challenge in restoring public trust to an office investigators suggested was trading state investment business for campaign contributions.

A former executive with Huntington Bank and Kemper Securities, she wants ethics and management training for treasurer employees. She also wants to make it clear that campaign contributions and treasurer investment decisions don t mix, even she prepares to run for the office in 2006.

Mary Boyle, the Cuyahoga County commissioner who unsuccessfully challenged Mr. Deters in 2002, said it was only a matter of time before the treasurer left.

There were three concerns with the way his office was being run the financial decisions that were being made, his chutzpah in asking for more authority and less oversight over what he was doing in the office, and the campaign finance issues, she said. It was the campaign finance issue that took the office apart, and to this day he has not taken responsibility.

While Mr. Deters was running for a second term as treasurer two years ago, Cleveland broker Frank Gruttadauria absconded with $125 million from his clients accounts. The subsequent FBI investigation unearthed a $50,000 check quietly written in 2001 to the Hamilton County Republican Party that the jailed broker later told investigators was a disguised contribution to Mr. Deters campaign.

A Cuyahoga grand jury investigation led to three plea deals. Mr. Deters former chief of staff and campaign staffer, Matt Borges; his campaign fund-raiser, Eric Sagun, and a personal friend and Cleveland lobbyist, Andrew Futey, entered pleas to misdemeanor charges related to giving preferential treatment to brokers and firms that contributed to Mr. Deters campaign.

Mr. Deters was not charged, and, despite the guilty pleas, insists none of his associates did anything illegal. He characterized the grand jury investigation, conducted out of the office of Democratic county Prosecutor Bill Mason, as a political witch hunt targeting him.

At the 11th hour, they were asked if they would be willing to plead to a misdemeanor and pay a $1,000 fine, he said. If you read the fact pattern to what they plead to, it was almost a joke. Matt Borges said that he produced a list of brokers that our director of investment had to return their phone calls, he said. All those salacious headlines of bribery, pay-to-play-nothing, zero.

Just weeks before the guilty pleas, Mr. Deters was planning to announce his candidacy for attorney general in 2006. But instead the treasurer walked through a door back to his home of Cincinnati, a door opened as a result of another scandal.

Hamilton Prosecutor Mike Allen admitted having an affair with an assistant prosecutor just as she was preparing a sexual harassment lawsuit against him. Although unopposed for re-election, he took his name off the ballot, paving the way for Mr. Deters to run a brief write-in campaign to replace him.

It s the first office I ve ever run for where the President of the United States thanked me for doing it, Mr. Deters said. The Hamilton County problem was emboldening and energizing Democrats in southwest Ohio.

As he heads for the door, Mr. Deters cites the results of a study he commissioned in the wake of election and scandal-related criticism that his office s practices weren t getting the best return possible on the roughly $160 billion in taxes, pension fund contributions, and other assets managed by his office.

The team, which consisted of professionals from several of Ohio banks, concluded the office s investment performance was comparable or better than appropriate comparison benchmarks.

My job, when I got elected in 1998, was to protect Ohio s money, and we put into place a series of safeguards and investment policies which, through six years of a very tumultuous economy, proved to be the right move to make, he said. Unlike other state treasurers, Ohio has never lost a dime since I ve been treasurer, he said.

Mr. Deters dismisses suggestions the guilty pleas entered by his associates have killed whatever statewide aspirations he has long held. I remember when Gov. [George] Voinovich s chief of staff went to prison, he said. It seems to me like Senator Voinovich has done pretty well since Paul [Mifsud] went to jail.

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.



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